In Brief:
- Hindenburg Research launched the Hindenburg Tether Bounty Program.
- The program has offered a reward of up to $1,000,000 to uncover Tether’s (USDT) backing.
- In response, Tether called this a “Cynical Bounty”
Financial research firm Hindenburg Research, a company dedicated to short-selling and exposing fraud, has offered a reward of up to $1,000,000 for information of Tether’s (USDT) reserve backing.
Hindenburg Research announced its launching of the Hindenburg Tether Bounty Program.
Nathan Anderson, founder of Hindenburg Research, said, “We feel strongly that Tether should fully and thoroughly disclose its holdings to the public. In the absence of that disclosure, we are offering a $1,000,000 bounty to anyone who can provide us exclusive detail on Tether’s supposed reserves.”
The stablecoin’s developer, Tether Limited, has historically maintained that USDT is pegged at 1:1 to the dollar. The claim that Tether maintained US dollar backing has always been subject to scrutiny. Critics have repeatedly challenged this assertion.
Earlier CFTC Charged Tether $41M for Violating Regulations and for illegal transactions and for violating Commodity Exchange Act (CEA) as well as failing to follow CFTC order.
After the Tether coin was deemed a “stablecoin” years ago, the company revealed that it was backed by only a small percentage of traditional currencies. It is being assumed that Commercial paper issued by unnamed counterparties makes up a large portion of its backing.
Tether refuses to provide transparency to the public on its holdings of that dollar backing despite multiple regulatory sanctions, this could be the primary reason behind this bounty hunting.
Despite its repeated claims of transparency, Tether has not been transparent about its holdings. Tether’s sparse disclosures raise questions about the validity of its backing.
In order to increase public knowledge of what they consider to be a growing threat for investors, Hindenburg Research encourages disclosure related to a crucial part of the crypto market, which is approaching “systemic” dimensions.
In response, Tether called it a “Cynical Bounty” and said, “This is not the first time Hindenburg Research has orchestrated an apparent scheme in pursuit of profit. Nor will it be the last. Tether abhors and denounces their actions and transparent motives.”
